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4 Mar, 2022 14:03

Crypto exchange blocks sanctioned Russian accounts

Ordinary users will not be affected for now, Coinbase says
Crypto exchange blocks sanctioned Russian accounts

Major cryptocurrency exchange Coinbase has blocked the accounts of Russian citizens and companies that are subject to US sanctions, the platform’s CEO said on Friday.

In a series of statements on Twitter, Brian Armstrong pointed out that every US company has to follow the sanctions laws, regardless of the type of assets it handles.

The exchange is “not pre-emptively banning” all Russians from using Coinbase, Armstrong added, acknowledging that “everyone deserves access to basic financial services” and ordinary citizens are using crypto “as a lifeline now that their currency has collapsed.” However, according to him, if the US government decides to impose a ban on ordinary Russians, the exchange will comply.

On Thursday, similar measures were introduced by the world’s largest crypto exchange, Binance.

“We have restricted access to the platform to everyone on the sanctions list. Thus, users who hold cards issued by sanctioned banks cannot use them on the platform,” the Russian branch of the exchange said in a statement on Telegram, adding that if the international sanctions are expanded, Binance will also comply.

Binance reiterated, however, that it is not going to ‘unilaterally freeze’ the accounts of millions of Russian users as such a move would contradict the reason why cryptocurrencies exist.

European officials began discussing restricting Russians’ access to cryptocurrency after the US and Britain expressed fears that Russia could use it to circumvent the sanctions. On Thursday, the EU said that it could target Russia’s crypto assets if the current sanctions over Moscow’s invasion of Ukraine prove insufficient.

The EU, the US and Britain targeted top Russian politicians, businessmen and industries with an unprecedented number of restrictions. According to Coinbase CEO Armstrong, however, it’s unlikely that wealthy Russians would resort to crypto to avoid the sanctions.

“Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold, or other assets,” he explained.

Earlier this week another major crypto exchange, Kraken, spoke against freezing the accounts of its Russian clients. If the platform was to voluntarily block residents of countries that provoke violence around the world, all US accounts should be frozen first, Kraken CEO Jesse Powell said on Twitter.

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